Is re­al­ism trump­ing pop­ulism?

Financial Nigeria Magazine
- 2018-05-01
- Contents
- The Board of Gov­er­nors of the IMF and Fi­nance Min­is­ters and Cen­tral Bank Gov­er­nors at the 2018 Spring Meet­ings of the IMF/World Bank in Wash­ing­ton D.C.

With eco­nomic con­di­tions re­turn­ing more or less to nor­mal around the world af­ter a decade of fi­nan­cial crises, na­tion­al­ist pop­ulism is now seen as the big­gest threat to global re­cov­ery. That was cer­tainly true of the fi­nance min­is­ters who gath­ered in Wash­ing­ton, DC, this month (read April) for the IMF’s an­nual spring meet­ing. But is it pos­si­ble that this con­sen­sus has emerged just as the pop­ulist wave has crested? Rather than pop­ulist pol­i­tics un­der­min­ing eco­nomic re­cov­ery, could eco­nomic re­cov­ery be un­der­min­ing pop­ulist pol­i­tics?

Look­ing around the world, pop­ulist eco­nomic pol­icy ap­pears to be in re­treat, even though no clear al­ter­na­tive is vis­i­ble. In the United States, Pres­i­dent Don­ald Trump seems to be curb­ing his pro­tec­tion­ist in­stincts, and eco­nomic re­la­tions with China are sta­bil­is­ing. In Europe, de­spite the me­dia fo­cus on the suc­cess of xeno­pho­bic politi­cians in Hun­gary and Poland, the pen­du­lum is swing­ing away from eco­nomic na­tion­al­ism in the countries that re­ally matter: France, Ger­many, Spain, and Italy, where the two pop­ulist par­ties that re­cently achieved elec­toral break­throughs are now vy­ing to show their de­vo­tion to the euro.

Even in Bri­tain, where eco­nomic na­tion­al­ism won its most spec­tac­u­lar victory over glob­al­iza­tion and mul­ti­cul­tur­al­ism in the 2016 Brexit vote, the tide may be turn­ing. The Bri­tish gov­ern­ment is grad­u­ally real­iz­ing that vot­ers do not re­ally want the com­plete rup­ture with Europe de­manded by hard­core Euroscep­tics. Nei­ther of the two al­ter­na­tives to EU mem­ber­ship pre­sented in the Brexit ref­er­en­dum – an in­ward­look­ing, pro­tec­tion­ist “Lit­tle Eng­land,” or a post-im­pe­rial “An­glo­sphere” based on the “spe­cial re­la­tion­ship” with Amer­ica and the Com­mon­wealth – is turn­ing out to be eco­nom­i­cally fea­si­ble or po­lit­i­cally attractive to vot­ers. While only 3-4% of vot­ers ad­mit to chang­ing their minds about Brexit, large ma­jori­ties want to keep most of the ben­e­fits of free trade, easy travel, im­mi­grant labour, and strong